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A newsletter for clients and contacts in the global mining industry

Recent events

A Road Map for Corporate Social Responsibility in the Extractive Sector - Corporate Social Responsibility Full Day Conference, Toronto, Canada, 26 April 2012

Held in our Toronto office this full day conference brought together guest speakers to address how Corporate Social Responsibility (“CSR”) has affected the corporate strategy and risk management approach of Canadian firms in the extractive industry. Topics included an in-depth overview of the challenges, opportunities, and trends in CSR and best practices in the industry. Norton Rose Group Conference presenters included Janne Duncan, Michael Torrance, Phil Fontaine, Richard King, Jean Piette and Elisabeth DeMarco. Guest speakers included individuals from mining companies, legal, financial, engineering, NGOs and CSR experts.

International CSR Standards: Benchmarks for Due Diligence and Risk Minimization, Toronto, Canada, 12 April 2012

Emerging markets present a complex and demanding operating environment for the mining industry, particularly with regard to the environmental and socio-economic challenges the industry often encounters in these markets. There are increasing pressures from a variety of actors for mining companies to operate in a socially responsible manner in order to establish and maintain their social license to operate. Presented by Madeleine Donahue and Avril Cole topics included:

Key international corporate social responsibility ("CSR") standards and their relevance to mining companies at all phases of the business cycle.

The case for integrating CSR objectives into the enterprise risk management framework.

Held in our Toronto and Calgary offices, the presentation addressed some of the legal and practical considerations facing companies in resolving disputes with entities or governments outside of Canada. While the focus of the presentation was on disputes in the mining and resources area, the subject matter applied to any Canadian or foreign company involved in international transactions and investments. Norton Rose Canada presenters included Dawn P. Whittaker, Canadian Leader - Mining and Commodities, Stephen L. Drymer, Robert I. Frank and Martin J. Valasek.

PDAC is the world’s leading convention for people, companies and organizations in, or connected with, mineral exploration. This year’s conference saw a record-breaking attendance of 30,000 plus attendees from 120 countries. Norton Rose Group participated in a number of events including:

Recent developments in proxy battles: Orestes Pasparakis and Walied Soliman of our Toronto office were joined by Riyaz Lalani, Chief Operating Officer of Kingsdale Shareholder Services, and Boyd Erman of the Globe and Mail.

We sponsored The Canadian Club of Toronto Luncheon featuring Hon. Jean Charest, Premier of Quebec; the CERBA International Mining Silver Conference; the Colombia Mining Day; and the Canada – South African Chamber of Business– Investing in Africa Mining Seminar.

Our Toronto office hosted a Roundtable and Cocktail Reception where clients and members of the media heard from the South Africa Minister of Mines, Namibian Minister of Mines and Sierra Leone Minister of Mines on current issues affecting mining in Africa.

The highlight of the week was a cocktail reception at the Real Sports Bar and Grill where guests enjoyed a live broadcast of the Toronto Maple Leafs home game.

As part of our national program of mining related client events, Norton Rose Australia held a board room round table discussion in the Mining Executive Series. This series of regular boardroom lunches provides a forum for general counsel and senior legal managers to discuss current issues in mining.

Discussions on financing trends in the mining and resources sector was led by banking and finance partners David Lyons and Craig Chapman, and mining partner Robert Milbourne.

Indaba is the world’s largest gathering of mining’s most influential stakeholders and decision-makers in African mining. Norton Rose South Africa and a contingent of partners from Norton Rose Group offices around the globe attended the conference.

Norton Rose Canada represented TSX listed North American Palladium Ltd., a Canadian producer of palladium and gold, in a $35 million bought deal offering of flow-through shares.

Norton Rose Canada represented TSX/AIM listed Rambler Mining & Metals plc in the strategic acquisition of new ordinary shares of Rambler resulting in Tinma International Ltd., a wholly owned subsidiary of a China based investor, controlling 9.9% of Rambler’s issued share capital. Proceeds from the investment will be used in part to advance Rambler's copper-gold mine in Baie-Verte, Newfoundland, Canada.

Norton Rose Canada acted as counsel to TSX, AMEX listed Banro Corporation, in connection with a $175 million offering of senior secured notes. The proceeds from the offering will be used for the development of the company’s Namoya project, a gold mine, located in the Twangiza-Namoya gold belt in the Democratic Republic of Congo.

Norton Rose Canada acted as counsel to Casimir Capital LP and Casimir Capital Ltd. in the private placement C$7.9 million offering of units of Oro Mining Ltd., a gold and silver exploration-mining company with advanced stage projects in Mexico.

Norton Rose Australia is advising Hong Kong based Junefield (Holdings) Limited on investments in South American mining projects with a combined value of up to $52 million. Under the transaction, Junefield will acquire up to 16.8% of ASX listed, South American focussed exploration and resource development company, Latin Resources Limited.

Norton Rose Australia acted for Brookfield Rail, in completing its US$882 million combined project and corporate financing, to be used to fund the expansion of its Mid-West below ground rail infrastructure network. Norton Rose Australia documented the transaction as sponsor counsel for Brookfield Rail. Brookfield Rail (100% owned by Brookfield Infrastructure Partners, NYSE and TSX listed) will use the proceeds of the financing to fund the expansion programme for its track infrastructure throughout the Mid-West of WA. This region is of broader economic and strategic significance to Australian export and trade, being the location of many PRC-supported magnetite projects. Brookfield Rail’s expanded track is a critical piece of infrastructure to enable iron ore from those projects to be transported to port for subsequent export, predominantly to China.

Norton Rose Australia advised China Development Bank and Bank of China on its syndicated A$426 million project finance loan facility and A$37.4 million working capital facility for Moly Mines Ltd on the development of its Spinifex Ridge molybdenum and copper and iron ore projects in the Pilbara region of Western Australia. It is the world's single largest molybdenum project to be delivered in over 25 years

Norton Rose LLP advised China Daye Non-Ferrous Metals Mining Limited, a company listed on the Hong Kong Stock Exchange, on the acquisition of four copper mines in China from an entity ultimately controlled by the Hubei Provincial Government for a total consideration of around US$900 million, which was satisfied by the issue of new shares and convertible notes. The transaction resulted in the reverse takeover and deemed new listing of the company.

Norton Rose LLP advised Allied Gold Group, an Australian-based gold producing mining company on an AUS $80 million prepayment facility from Red Kite, involving the sale of gold to Red Kite from Allied Gold Group mines in the Solomon Islands and Papua New Guinea.

Norton Rose LLP advised Anvil Mining on agreements with the Democratic Republic of the Congo (DRC) stakeholders for its proposed takeover by Minmetals Resources. On 10 February 2012, Anvil Mining Limited reported that it has reached agreement with La Générale des Carrières et des Mines Sarl ("Gécamines") on the terms of revised commercial agreements, which include the acknowledgement and welcome by Gécamines of the change of control of Anvil Mining Limited that will result from completion of the takeover bid launched by Minmetal Resources Limited for the shares of Anvil Mining. The agreements with Gécamines cover both the Kinsevere Project and the Mutoshi Project, two mining projects in the Democratic Republic of the Congo (DRC), and include confirmation that titles held by DRC subsidiaries of Anvil Mining Limited to the Kinsevere and Mutoshi Projects are valid and in good standing and agreement that all claims and historic allegations of breach are cured. Mining Company Katanga SPRL, which holds a five per cent interest in the Kinsevere Project, has also acknowledged and welcomed the acquisition of control of Anvil Mining Limited that will result from completion of the proposed takeover bid.

New tax on Australian mining projects

May 2012

The controversial Minerals Resource Rent Tax (MRRT) has now become law in Australia and will come into effect on 1 July 2012. The MRRT is a tax on profits made from extracting iron ore and coal in Australia, as well as gas extracted as a necessary incident of coal mining and gas produced by the in situ combustion of coal.

Conflicts over commodities – the coal seam gas balancing act

May 2012

Australian governments are responding to increased pressure to address land use conflicts through the introduction of new legislation and policy initiatives that seek to manage competing interests. The coal seam gas (CSG) industry illustrates the current challenges faced by government to balance the interests of agricultural landholders and other stakeholders, including petroleum and mining companies, seeking access to land, in the context of growing awareness and concern over environmental impacts, such as water.

2012 Canadian Federal Budget Mining Tax Update

April 2012

On March 29, 2012, the Minister of Finance (Canada) introduced the 2012 Canadian Federal Budget ("Budget 2012") into the House of Commons. In this update, Norton Rose Canada’s Adrienne Oliver, Ed Heakes and Ryan Shewchuk provide interpretation of a few provisions of note in respect of the taxation of mining operations in Canada.

Ghana's Budget 2012: Is there cause for concern for the mining industry?

While many of the changes will rightly concern mining companies operating in Ghana, the reality is that many have stability/development agreements with the government to protect against adverse consequences of newly introduced laws. Many of the provisions of stability/development agreements include concessions to mining companies on corporate taxes, windfall taxes, mineral royalties and property taxes. Essentially, these stability/development agreements could make the announced changes less effective.

Proposed amendments to the Burkina Faso Mining Code

March 2012

The Government of Burkina Faso is currently considering amendments to the Mining Code (Law no. 0312003/AN dated 8 May 2003). A preliminary draft new Mining Code integrating proposed amendments has been circulated to the mining industry for its consideration and comments.

This preliminary draft appears to be geared toward bringing clarity, correcting the flaws and better defining the obligations imposed upon mining operators, rather than constituting an in-depth reform of the industry. In addition, as currently proposed, the new Mining Code would preserve the validity of the existing mining conventions. Nevertheless, new obligations are proposed and some will affect even the operators who are party to an existing mining convention.

Canadian mining company + Australian head office + Quebec local office + Congolese military conflict = Quebec jurisdiction over war crimes class action?

Does a Quebec court have jurisdiction over a company incorporated under the laws of the Northwest Territories of Canada, with a head office in Australia and a local office in Quebec, in respect of alleged war crimes that occurred in the Democratic Republic of Congo in the context of a military conflict between government troops and secessionist forces? This was the essential question addressed by the Quebec Court of Appeal in the case of Anvil Mining Ltd. v. Association canadienne contre l’impunité (2012 QCCA 117). In a judgment issued on January 24, 2012, the Court dismissed the action for lack of jurisdiction.

Consolidation in the mining industry: Gathering momentum at last?

March 2012

The mining industry continues to go from strength to strength compared to other industries, as all economies face the challenges caused by geo-political tensions, the uncertain global recovery and the fallout from the global financial crisis. Commodity demand continues to be driven by strong growth in the emerging markets and strong investment demand for commodities such as gold. Supply constraints caused by lack of historic investment in exploration, the liquidity squeeze, rising cost base in the mining industry and, even, the fact that the world is actually running out of some commodities are starting to have an impact. The demand/supply equation continues to drive prices for commodities and as a result, the industry as a whole continues to go from strength to strength.

Update on the status of the Guinean Mining Code and any contract review deriving therefrom

February 2012

In the February 2012 issue of Mining Journal, Dinara Dorizo, of counsel, Norton Rose (Central Europe) LLP discusses the unique aspects and steps involved in the successful acquisition of an asset in Russia whether by obtaining a mineral licence or by acquiring equity in a company which holds a licence.

Antimonopoly law in China

February 2012

Since the Antimonopoly Law of 30 August 2007 came into force on 1 August 2008, China has quickly emerged as an important competition law jurisdiction both for domestic companies and for international businesses with activities in China.

PNG Legal Briefing: Amendments to Environment Act 2000

February 2012

In January 2012, the O’Neill Government introduced a bill to repeal certain amendments made in 2010 to the Papua New Guinea (PNG) Environment Act 2000. This briefing is about the proposed new law and its potential consequences particularly for the mining and oil and gas sectors in PNG.